Major oilfield services provider Halliburton
Co. ( HAL )
is set to release its first-quarter 2013 results before the opening
bell on Monday, Apr 22.EPL OIL&GAS INC (EPL): Free Stock Analysis
ReportEXTERRAN PTNRS (EXLP): Free Stock Analysis
ReportHALLIBURTON CO (HAL): Free Stock Analysis
ReportSEMGROUP CORP-A (SEMG): Free Stock Analysis
ReportTo read this article on Zacks.com click here.Zacks Investment
In the preceding three-month period, Halliburton delivered a
positive 3.28% earnings surprise - the third outperformance in the
last 4 quarters - helped by robust performance from its
international business. Let's see how things are shaping up prior
to this announcement.
Factors to Consider This Quarter
With some relief in the cost for guar gum - a key constituent of
the company's market-leading hydraulic fracturing ('fracking')
procedure - Halliburton expects its North American margins to stage
a partial recovery. However, utilization and pricing pressures in
the region will continue to affect the bellwether's
More alarmingly, with the quarterly domestic land rig count
falling by some 3% sequentially, there is a considerable risk to
Halliburton numbers because of its heavy U.S. leverage.
Additionally, the recent weakness in crude prices has raised
questions about a possible decline in oil service demand from
operators like Halliburton.
Our proven model does not conclusively show that Halliburton is
likely to beat the Zacks Consensus Estimate in the first quarter.
That is because a stock needs to have both a positive Earnings ESP
(Read: Zacks Earnings ESP: A Better Method) and a Zacks Rank #1
(Strong Buy) or at least Zacks Rank #2 (Buy) or Zacks Rank #3
(Hold) for this to happen. Unfortunately this is not the case here
as elaborated below.
Negative Zacks ESP: This is because the Most
Accurate estimate stands at 57 cents, while the Zacks Consensus is
higher at 58 cents. This results in a difference of -1.72%.
Zacks Rank #3 (Hold): Halliburton's Zacks Rank #3
(Hold), however, increases the predictive power of ESP. That said,
we also need to have a positive ESP to be confident of an earnings
We caution against stocks with Zacks Rank #4 and 5 (Sell rated
stocks) going into the earnings announcement, especially when the
company is seeing a negative estimate revisions momentum.
Stocks to Consider
Here are some energy firms you may want to consider on the basis
of our model, which shows that they have the right combination of
elements to post an earnings beat this quarter:
Exterran Partners L.P. ( EXLP ), Earnings ESP
of +4.35% and Zacks Rank #1 (Strong Buy).
EPL Oil & Gas Inc. ( EPL ), Earnings ESP of
+9.76% and Zacks Rank #1 (Strong Buy).
SemGroup Corp. ( SEMG ), Earnings ESP
of +5.26% and Zacks Rank #1 (Strong Buy).